China has removed a major restriction on foreign investment in the financial sector, a measure long demanded by the United States, with which it is waging a trade war.
|China removes a restriction on foreign investment.|
China restrictions on foreign investmentForeign banks will now be able to establish branches in China and hold all the capital without necessarily associating with a local partner, according to the banking regulatory authority (CBIRC).
Until now, foreign banks were required to associate with a local partner and were not allowed to own more than 49% of the joint-venture in which they had invested.
This announcement sounds like a gesture of goodwill from China to the United States, at a time when a preliminary trade agreement between the two powers is expected to be signed later in January, according to Washington.
The first two economies have been fighting a trade war since March 2018 that has resulted in mutual fees of hundreds of billions of dollars in bilateral trade.
Beijing has long promised to open its economy further to foreign investment, but it has been slow to fulfill its promise to the financial sector.
In October, China announced a schedule to lift several restrictions and in December, Swiss bank UBS was authorized to have a majority stake in its activities in the country.
Since January 1, foreign companies specializing in long-term contracts can invest in China without limits on capital ownership.
Fund management companies will be able to benefit from this measure from April 1 and brokerage firms from December 1, 2020.